Ethical and Social responsibility issues in IHRM Report

Executive Summary

There are several issues be it ethical or social responsibility that are involved in Human Resource Management on the international platform. It is usually upon the decision makers to ensure that the welfare of the society is improved. Every decision made within the organization has an effect on people. These include; automation, outsourcing, laying-off some of the employees, closing down an existing branch or opening a new one.

It is therefore important for decision makers to put the interests of the society in mind while making any decision. There is need for multinational firms to consider ethics as well as corporate social responsibility in their operations. Despite the fact that different scholars hold different opinions about ethics and corporate social responsibility, there is need for a multinational firm to include the two in its operations so as to create a good business environment and benefit the society.^[1]

Introduction

A human resources manager within a multinational firm has the responsibility of overseeing the human resource issues within his organization as well as in the overseas operations. An international firm is usually prone to more challenges concerning their operations as well as decision making.

Human resource managers within multinationals are usually challenged to ensure the overall economic development particularly in the countries where they are situated, carter for the needs of the employees as well as their families and ensuring that the society benefits as well. Business ethics are supposed to be observed for the organization to succeed.

Legal procedures are to be observed in the operations of the organization. In the case of an international firm, the societies that benefit from the firm are not just local but different people across the globe. There is therefore need to put into consideration different issues like environmental protection, the protection of people’s human right, creating employment as well as fighting and preventing HIV/AIDS. The firm needs to empower the people economically hence improving their living standards.^[2]

Main Body

International Human Resource managers have a great task in ensuring that as much as an international firm aims at maximizing the profits, they have they responsibility of ensuring that the people are not rendered jobless due to its operations or the adoption of technology in its operations. The firm is supposed to have a qualified workforce with efficient processes of administration that are transparent.^[3]

Demand Conditions

The firms are usually faced with the challenge of providing quality goods and services to the customers that are scattered across the globe. It is usually a requirement for the firm to provide quality goods or services so as to satisfy the needs of the local as well as international customers.

The firms are usually pressured to go by the current technological advancements so as to ensure quality production and service delivery. A company might for instance adopt social responsibility techniques by starting projects for the communities in the areas where they are situated so as to market its products.

Apple for instance managed to expand its consumer base by offering computers to schools across the globe so as to make its applications known to the market and this improved the sophistication of the students as well as tutors. This was therefore an example of corporate social responsibility not just at the local but at the international level as well.

Related/Supporting Industries

Before a firm opts to outsource its services, it is always good to consider options that are cost effective like using a taskforce and machinery that is less costly. This usually ensures responsive and cost effectiveness. The transportation costs are supposed to be reduced and it should have many benefits to the locals as well as the international population by providing employment hence improving their living standards. It should be easy to exchange information as well as innovation.

Strategy and Rivalry

Multinational firms are usually prone to issues of unfair competition as well as issues of corruption. They face the challenge of fighting corruption as well as opening up the market and encouraging fair competition hence an environment that is productive and transparent is encouraged. Most of the firms have for instance supported organizations like Transparency International in their efforts to fight corruption in organizations across the globe. The society is therefore able to benefit as well as opening up the market for such firms.^[4]

Corporate social responsibility for a multinational is therefore beneficial not only to the firm but to the society at the local and international level as well. The sole purpose of a firm should be to benefit all the people involved and not just a few. Any business organization is supposed to benefit the society. If this is not the case then the organizations charter can be amended or revoked as the community will be having no reason to have it around if its needs are not met.

With globalization and internalization of most corporations, such firms have been able to expand their operations to countries that have lower economic developments and living standards. Most of them have therefore engaged in corporate abuses.

Most of them have engaged in irresponsible activities that lead to environmental pollution among other vises. Oil companies for instance have engaged in water, soil, sound as well as air pollutions issues that affect the community negatively. This has resulted into the need for social action so as to ensure that these companies engage in responsible actions.^[5]

Corporate social responsibility at the international level usually ensures that the contribution of the firm is positive towards the community in which it is located and this result in a good relationship between the firm and the community. This makes it easy for the firm to get employees across the globe and the cost of retaining the workforce is usually lower.

There is a significant reduction in absenteeism and turnover. The firm is therefore in a position to thrive. Bettering the environment usually results in a better working/business environment. Less money is therefore spent on ensuring that the firm is secure as well as the executives of the firm.

Argument against Corporate Social Responsibility

Several people have argued against corporate social responsibility each giving their own reasons for their stand. Milton Friedman who is an economist for instance has argued against corporate social responsibility basing his argument on social, legal as well as economic perspectives. Arguing on the economic perspective, he argued that allocating the funds of a firm to other areas rather than those meant to increase the profits, or ensuring efficiency in the market only result in misallocation of resources within the economy.

He argued that managers are legal representatives of the firm’s stakeholders and allocating funds on something else rather than maximizing the profits amounts to stealing from the stakeholders. He states that if the stakeholders had the interest of spending money on social purposes, then they need to do so personally using the dividend. He argues that social responsibility is a sign of short sightedness and it is suicidal.^[6]

An international firm is posed with the challenge of ensuring that a firm maintains high standards, the firm has to ensure that the compensation as well as the benefits of the workers are met.

The policies and practices of these firms are supposed to be abided by and all the records of the employees in various branches of the firm be kept well. The firm has the responsibility to ensure that its activities are carried out in an ethical way and etiquette is observed. The company employees across the various nations are supposed to be updated over the same so as to avoid embarrassing situations.^[7]

The firm is supposed to ensure that the issues like drug and substance abuse among the employees as well as the communities in which they are situated are prevented. The firm is endowed with assisting the employees as well as ensuring spirituality and diversity among the workforce. The firm must ensure that the laws and standards set by the respective countries are followed to the later.

It must channel its effort towards ensuring job creation in the countries where they are based and not causing job loses. It is usually a challenging task for the firm to ensure that its human resource is fully utilized. The firm’s management has to ensure that there is effective resource planning, carrying out training and development of the staff as well as ensuring there are positive labor relations, the employees are safe and healthy. It is also responsible for the management of change and culture.^[8]

Most firms usually find it difficult to adapt to the new environments in which they are situated be especially due to the cultural differences between the new environments and the places where they are situated. Their human resource practices tend to differ. It becomes a big challenge for these firms to align themselves to the new economic, political, legal as well as cultural environments.

It has particularly been a big challenge to come up with a global approach to Human recourses given that different regions have their own approaches and policies governing the issues of human resources management. There is therefore for no consistency or integrity in the issues of Human Resource Management on the international platform.

The management of cross-boarder alliances has proved to be a very tasking endeavor given that the cost of production across boarders is a big challenge due to the issues of cost as well as hardships in penetrating new markets.

Conclusion

Multinational firms face different issues which include ensuring that the firm maximizes its profits, the employees’ needs are met, the environment is protected, there is efficiency within the firms and they have a competitive advantage over the other competitors. Above all these it is usually upon the firm to ensure that its operations are carried out in a way that is ethical and responsible.

The firm needs to be accountable to the community around as well as other stakeholders. The firm is supposed to benefit the society by improving their living standards through provision of employment opportunities as well as starting programs that benefit the community like educating the community against substance abuse as well as HIV/AIDS.^[9]

With the increase in globalization, many firms have found the issues of observing corporate social responsibility as a huddle and have resorted to activities that have negative impact on the society.

Human Resources Management at the international level is therefore aimed at ensuring that companies or firms that have their operations across boarders adhere to the set standards and they obey the law besides raising the living standards of people that are linked to them in a way, for instance the communities around or the employees. They are supposed to engage in activities that are environmental friendly and ensure a good working or business environment.

International Human Resources is aimed at ensuring that a check is put on the activities of the firms and ethics as well as etiquette is observed in the operations of these firms. Companies or firms are supposed to ensure that corporate social responsibility is at the center of their objectives. At times they might have to use corporate social responsibility consultants or expertise in ensuring that its activities are beneficial to the society.^[10]

Firms must have strategies in place to ensure corporate social responsibility within their operations. Through ensuring corporate social responsibility, a firm creates a good business environment hence helping in the success of its operations. Although corporate social responsibility has been encouraged at many levels, there are those who perceive it as a misallocation of resources and a way of stealing from the stakeholder.

Recommendations

Any multinational needs to do several things so as to ensure success in its operations for instance, firms need to;

• Reward its hardworking employees and adopt compensation systems for its employees in the various nations.
• Carry out training to ensure that the employees are updated on the skills as well as technological advancements.
• Monitor the performance of the employees to ensure accountability.
• Ensure they stick to the set standards of quality.
• Adhere to etiquette and ethical ways of carrying out their operations at the places where they are situated.
• Focus its efforts towards ensuring that the problems of the society are solved. Its impact must be felt not just in their environments but in other places.
• Promote multiculturalism by coming up with ways of eliminating cultural boundaries given that multinationals employ people from different cultural backgrounds.

Bibliography

Hofstede,G. Cultures and organizations: software of the mind. London: McGraw-Hill. 1991.

Ibarra,H. “Personal networks of women and minorities in management: A conceptual framework.” Academy of Management Review, 18 no.1 (1993): 56-87.

Legge,K. Human resource management: rhetorics and realities. London: Macmillan.1995.

Liff,S. “Diversity and equal opportunities: Room for a constructive compromise?.” Human Resource Management Journal, 9 no.1 (1999): 65-75.

Marini,M. and Fan,P. “The gender gap in earnings at career entry.” American Sociological Review, 62 no. 1 (1997): 588-604.

Pfeffer,J. Competitive advantage through people: unleashing the power of the work force. Boston: Harvard Business School Press. 1994.

Ragins,B. and Scandura,T. “Gender differences in expected outcomes of mentoring relationships.” Academy of Management Journal, 37no.4 (1994): 957-971.

Shappiro,G. “Quality and equality: Building a virtuous circle.” Human Resource Management Journal, 9 no.1 (1999): 76-86.

Sparrow,P. and Hiltrop,J.M. European human resource management in transition. New York: Prentice Hall. 1994.

Storey,J. “Equal opportunities in retrospect and prospect.” Human Resource Management Journal, 9no.1 (1999): 5-8.

Footnotes

1. Hofstede,G. Cultures and organizations: software of the mind. London: McGraw-Hill. 1991.
2. Storey,J. “Equal opportunities in retrospect and prospect.” Human Resource Management Journal, 9no.1 (1999): 5-8.
3. Ibarra,H. “Personal networks of women and minorities in management: A conceptual framework.” Academy of Management Review, 18 no.1 (1993): 56- 87.
4. Legge,K. Human resource management: rhetorics and realities. London: Macmillan.1995.
5. Liff,S. “Diversity and equal opportunities: Room for a constructive compromise?.” Human Resource Management Journal, 9 no.1 (1999): 65-75.
6. Marini,M. and Fan,P. “The gender gap in earnings at career entry.” American Sociological Review, 62 no. 1 (1997): 588-604.
7. Sparrow,P. and Hiltrop,J.M. European human resource management in transition. New York: Prentice Hall. 1994.
8. Pfeffer,J. Competitive advantage through people: unleashing the power of the work force. Boston: Harvard Business School Press. 1994.
9. Ragins,B. and Scandura,T. “Gender differences in expected outcomes of mentoring relationships.” Academy of Management Journal, 37no.4 (1994): 957-971.
10. Sparrow,P. and Hiltrop,J.M. European human resource management in transition. New York: Prentice Hall. 1994.